Thoughts on this year's mock

difficulty, including, although, everyone, expected

Took the Mock Exam today--didn't think it was too bad although a few tricky questions. Scored a 73.33 (44/60) but made a couple of really dumb mistakes including circling the correct answer and bubbling in the wrong answer in one instance. Honestly, I would be content if this was the difficulty level of the actual exam. I expected worse. What were everyone else's thoughts?

Additionally, two quick questions on this exam.

19. I was able to get the price weighted index % change, but is there a way to calculate the equal weighted index % change to confirm it is less?

49. Why is the answer a binary credit option and not a credit spread option? I know in the text it says that a binary credit option prevents downgrade risk, but I thought that the two were identical--just one was on the price and one on the rate.

. Sharing Finquiz & Schweser Level 2 2017 materials

. Default Risk Premium for a One-Period Debt Instrument, QM ba

. GDP vs. GNI question

. 2 questions on Corporate Governance

Darien

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发表于 2011-7-13 13:29 | 只看该作者

19. I asked this question earlier. The consensus was to take an equal weight in the change in price as opposed to the change in mkt value.

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lcai

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发表于 2011-7-13 13:29 | 只看该作者

Don't argue with me regarding these answers. You have a tendency to do that. ;)

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skycfa

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发表于 2011-7-13 13:29 | 只看该作者

Downgrade risk can be hedged via credit options (Schweser Book 3 page 102).

There are two types of credit options. If based on price, then it is a binary credit option. If based on yield, it is a credit spread option. (Schweser Book 3 page 84).

Thus, to me, binary credit options and credit spread options should both work.

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aidebaobao

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发表于 2011-7-13 13:29 | 只看该作者

Both should work, but I believe the mock mentioned she was looking to hedge a specific event (crossing over from investment grade to below investment grade).

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pennyless